Cash Assistance IS working in Gaza, despite the skepticism: Here’s why

One of the first humanitarian responses to the current Gaza crisis involved cash assistance. Since its implementation, skepticism has loomed over its usage. Concerns about market depletion, telecommunication and electricity cuts, financial service provider (FSP) functionality, and liquidity are constant topics of discussion in the Cash Working Group (CWG), donor meetings, and among CVA practitioners. Despite these challenges, cash assistance in Gaza is still being carried out, challenging several misconceptions about its effectiveness in such a volatile environment.

Challenges to cash assistance implementation

Doubts about the feasibility of cash assistance in Gaza arise from several critical points: The collapse of the formal markets resulting in informal markets becoming the center of economic activities, inflation, diversion of cash assistance and shortages of essential goods are some of the most frequently debated challenges. Additionally, the infrastructure in Gaza is fragile, with frequent power outages and unreliable telecommunication networks. These disruptions can hinder the efficient delivery and monitoring of cash transfers. Financial service providers in Gaza face operational challenges due to the political and security situation, adding to concerns about their ability to manage and distribute cash effectively and responsibly. Ensuring sufficient cash flow for distributions is another major hurdle.

Impact and Effectiveness of cash assistance in Gaza

Despite these obstacles, cash assistance was one of the first responses in Gaza, starting from October 13th. According to the Gaza CWG, since that date, cash actors have delivered at least one payment of emergency multipurpose cash assistance (MPCA) to over 178,000 households, reaching over 1.2 million people. Data indicates that cash assistance has had positive impacts on the lives of those receiving it. Post-distribution monitoring (PDM) conducted by cash actors revealed that the majority of recipients used the MPCA to cover some urgent needs, primarily food, drinking water, and medicine. No one reported being unable to purchase anything. In addition, according to the report Gaza Strip – Market Overview and Multi Purpose Cash Assistance Analysis, the majority of respondents reported a preference for cash assistance.

It’s noteworthy that actors on the ground continue to stress the need for both cash and in-kind assistance. It has been observed that cash assistance has helped ‘re-distribute’ in-kind aid, with people selling what they don’t need and using cash to buy what they want. In the absence of regular commercial goods, in-kind assistance has served a complementary purpose in Gaza.

What can we learn from cash assistance in Gaza?

The success of it can be attributed to several factors:

Preparedness and Coordination

Good preparedness and coordination stemmed from both the preparedness of the Gaza Cash Working Group (CWG) and the coordination amongst actors and the CWG.

From a preparedness perspective, the Survival Minimum Expenditure Basket (SMEB) was set prior to the crises which kicked off the process fast, the CWG coordinators and actors developed a harmonized PDM, and a blanket targeting was set at the start. For the list of beneficiaries, the CWG coordinators utilized a prior database that existed.

In terms of coordination, the CWG facilitated collective decision-making and implementation, with actors working as one body. CWG coordinators created a useful task team for implementers who worked together to cross-check from different lists and databases, avoid duplications, monitor markets, develop advocacy messages, and create tools.

Flexibility and Innovation

For cash assistance to be carried out in such a volatile and ever-changing environment, flexibility around implementation is key, with donors needing to give practitioners space so that they can overcome challenges, adapt and innovate. Currently, this is evident as the Gaza CWG and cash actors are now piloting mobile money solutions and digital payment platforms, to face the challenges of liquidity in Gaza. In addition, cash actors have been exploring Group Cash Grants as another form of humanitarian aid, and working together to identify and support community and group needs with cash. These actions demonstrate the innovative spirit which is driving success in cash assistance and ensuring its continuity and efficiency.

What does this mean for other crises?

Demonstrating that cash assistance can work effectively even in highly challenging environments helps dispel myths and build confidence among donors and practitioners. The success of cash assistance in Gaza holds important lessons for humanitarian response strategies globally and provides compelling evidence to advocate for its use in other crises. In this crisis cash assistance has proved itself to be an adaptable and flexible tool in the humanitarian toolkit, with the ability to meet a diversity of needs and to be scaled and tailored to different contexts.

It is crucial to continue exploring and refining cash assistance approaches, ensuring they are prepared to meet the needs of vulnerable populations in conflict-affected areas and beyond. The experience in Gaza underscores the need for continuous preparedness and innovation in humanitarian responses. We’ve also seen the need to develop robust partnerships with FSPs, and that leveraging technology can significantly enhance the effectiveness of cash assistance programmes.

By embracing the potential of cash assistance and learning from successful implementations, we can build more responsive and effective humanitarian systems, ultimately improving the lives of those affected by crises around the world.

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Main image: Palestinians crowd at a local street market in Rafah. UNRWA said the population of the city of Rafah has nearly quadrupled to more than 1.300 million people, in Gaza Strip.© Anas-Mohammed. January 2024.